Viewpoint -- Does Anyone Believe the U.S. Manufacturing Sector is Going to Grow Substantially?

Jan. 3, 2012
It is difficult to imagine how someone in the U.S. could start a small business with any rapid growth potential when the regulations and government oversight don't allow for a competitive manufacturing advantage inside the global economy.

Note: This article is in response to What if Public Policy Changes Are Not Enough?

I contend that no one in the U.S. manufacturing industry believes that the U.S. manufacturing sector has job-growth potential.

While there was fanfare one year ago for the sake of public relations, when our president appointed Jeffery Immelt to chair the "President's Council on Jobs and Competitiveness," the only good that has come from this council is the insider information these members can access that will allow them to make informed decisions about where to drive their business planning.

GE and other large international corporations need to manufacture outside the United States for many reasons, and they all directly impact profitability on a global scale.

It is common knowledge that the president does not like manufacturing or anything else that has the potential to generate wealth, and/or allow the current middle class to sustain its existence.

Manufacturing has represented the last economic force for sustaining a large upper middle class in the United States. The massive growth in the service industries, to which the financial institutions also belong, employee a lower level middle class where the top <1% reap the rewards of an oversupply of barely educated to highly educated individuals.

Our legislators made a targeted decision 40 years ago that rising manufacturing cost were responsible for hyper-inflation and traditional manufacturing was destined to become a dying industry in the bigger picture of where technology was moving at that time.

Our legislators enacted legislation to make off-shoring attractive to U.S. companies, thereby opening the door to cheap imports that created completion to force U.S. manufacturers to reduce cost by outsourcing. It is obvious that the mission was accomplished because any inflation being driven by normal costing inputs is generations away.

The next round of hyper inflation will be driven by a new paradigm that is developing from current legislation and economic conditions that are designed to put the private sector in direct competition with the U.S. government for the resources that impact both direct and indirect cost.

It is difficult to imagine how someone in the U.S. could start a small business with any rapid growth potential when the regulations and government oversight don't allow for a competitive manufacturing advantage inside the global economy.

I gave my congressman this vision of the future for starting a small business and I sensed from the response that the people in Washington D.C. are so removed from understanding small business management that they don't see a connection between business friendly legislation and maintaining or creating jobs. I think that they truly believed that financial institutions, green legislation, and consumer spending create lasting job growth, and they don't really care what the economic value impact of a good job looks like.

Our legislatures and current president have bought into the idea that the government can create a perpetual economic model that doesn't require a private sector economy to sustain a class of people that will materialize to become economic equals. Don't expect your grandchildren to experience the middle class standard of living the baby boomers have had, unless you can help them elevate themselves to being self-sufficient entrepreneurial global nomads.

Another response to article:

I've wondered about this many times and came to the same conclusion. You put it in question format, but I grew up on a farm and have watched the profound changes in that industry over the last 65 years or so. I've been in electronics manufacturing for more than 50 years and see the same thing happening here. We are automating both industries in order to eliminate labor and there are many reasons for doing so besides a competitive economy.

Personally I find it much more interesting to solve technical problems than milk cows by hand, and more rewarding too. Even Foxcon, the foreign manufacturer of iPads is planning to build one million robots to reduce production costs and replace personnel. There is nothing in the foreseeable future that will change the trend short of some sort of catastrophe, almost certainly no type of legislation can prevent it.

It is nice to think that we'll innovate our way out of this, but almost all of our innovations are to make life easier; in other words, to eliminate work or provide entertainment. We can manufacture anything, but it's likely to lead to fewer jobs, not more. Yet jobs are the foundation of any economy. It's almost like we're heading into the Brave New World.

Dennis Siemer
V-TEK, Inc.
Mankato, Minn.

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